Turkmenistan and Iran inaugurate gas pipeline

Dec 30, 1997 01:00 AM

The presidents of Turkmenistan and Iran have inaugurated a key gas pipeline with hopes it will soon be part of a much larger regional network sending gas all the way to Europe.
President Saparmurat Niyazov and visiting Iranian President Mohammed Khatami travelled to the western desert of Turkmenistan to formally launch the 200 km line.
For now, the new pipeline will only send gas to northeastern Iran for domestic consumption in Iran. The pipeline, running from Korpedzhe in Turkmenistan to Kord Kuy in Iran, can deliver a relatively modest 4 billion cubic meters of natural gas a year.
Iran paid some 80 % of the $ 195 million in construction costs, and Turkmenistan will pay back its debt in natural gas supplies within three years. Turkmenistan will sell its gas to Iran at the price of $ 40 per 1,000 cubic meters.
Both countries hope the pipeline will be the first link in a much larger chain.
Turkmenistan is seeking a pipeline network that will allow it export its huge natural gas reserves to the rest of the world. Until recently, Turkmenistan's only export pipeline ran through Russia, and Moscow is reluctant to have Turkmen gas compete with its own exports.
"This event is of a great importance to Turkmenistan,'' Niyazov said at the opening ceremony. "On the seventh year of our independence, we finally have got an alternative route for our main export commodity.''
Khatami echoed the statement, saying the pipeline "will lead to the political and economic development of Turkmenistan,'' and "reinforce the pillars of Turkmenistan's independence,''.
In a key development, the leaders of Iran, Turkey and Turkmenistan reached a preliminary agreement to build a gas pipeline through their countries and on to Europe.
All three countries, along with several others, see themselves as important players in the bid to control the oil and gas wealth of the Caspian.
However, regional wars, political conflicts and financial feuds have all slowed or prevented many projects from getting off the ground.
The United States, meanwhile, has opposed plans to pump natural gas from Turkmenistan through Iran. The Americans don't want Tehran to gain too much influence over the Caspian resources. Washington favours multiple oil and gas pipelines criss-crossing the region, saying that the competition will prevent any one country from developing a stranglehold on the region's energy resources.
When the Caspian's energy resources are exploited to the full, a prospect that's still decades away, the region is expected to be second only to the Middle East in energy production.
The leaders of Iran, Turkey and Turkmenistan have said they wouldn't exclude any export routes. Oil ministers from the three nations said that Shell would handle the technical aspects of developing the future pipeline.
The various routes have been under discussion for years. Some of the oil pipelines are beginning to move ahead, but no major gas pipelines are expected to be completed for at least several years.
According to Turkish Prime Minister Mesut Yilmaz, the Turkmen gas could either go through Iran or under the Caspian Sea.

Source: not available
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